Fly Fishing the Stock Market: How to Search for, Catch, and Net the Market's Best Trades E-Book

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• published: 29 Sep 2016
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Read your free e-book: http://hotaudiobook.com/mebk/50/en/B0096D9PZS/book Q & A with Stephen Morris, Author of Fly Fishing the Stock Market What are the parallels between fly fishing and trading? Every aspect of catch-and-release fly fishing can be compared to trading, from stalking the prey to managing the catch and landing the fish, and all the important details in between. What I have learned most by comparing fly fishing with trading relates to "seasons" and "strategies" that exploit each season. Take fishing for instance. Fly fishermen encounter the constant need to "match the current fly hatch." They do this by closely imitating the fly or insect that fish are feeding on. These hatches are not randomthey are cyclical and specific to each season throughout the year. Likewise each cycle of the stock market produces different and specific price patterns. This behavior of prices is repetitive; not random. Trading strategies that are designed to profit from those price tendencies will optimize trading success. Another parallel is in managing the catch. Most amateur fly fishermen panic when they hook a big fish and over tighten the 'drag' when the fish attempts to escape. This results in a broken line and a hollow story of what could have been. Likewise, novice traders give profitable trades little room to run and either exit too early or too late. Successful traders spend far more time on trade management and exits then they do on entries. They possess a keen sense of awareness as to when to cut and run and when to allow the trade to run. They have rules and strategies that govern when they enter, when they exit, and how much "drag" to apply so that their trades capture the major portion of what the market is willing to offer. Effective drag management, like trade management is what separates the pros from the beginners. Your trading mentor was Alex Elder. What have you learned from Alex and how does your approach differ? Alexander Elder's popular books provided me with an understanding of the principles of psychology in trading and gave instruction as to how to recognize footprints of fear and mania on technical charts in various time frames. I found that once I was able to grasp that concept and combine it with the use of technical indicators, I began to spot effective trade setups. Though there are more similarities than differences in our respective trading methods, there are a few key differences. What stands out the most is the use of Classical Charting